E'er and E'ee agree that E'er will pay E'ee $xx if E'ee works two more years. Payment will be made the day after the two-year period has passed and the plan doesn't provide that this timing may be changed by the E'ee. Am I correct that the deferral election requirement under 409A(a)(4) is not applicable?

Thanks,
Ken Davis

<<E'er and E'ee agree that E'er will pay E'ee $xx if E'ee works two more years. Payment will be made the day after the two-year period has passed and the plan doesn't provide that this timing may be changed by the E'ee. Am I correct that the deferral election requirement under 409A(a)(4) is not applicable?Thanks, Ken Davis>>

It's a short term deferral and is not subject to 409A.

A two-year deferral is a short-term deferral?

"Short-term deferral" is 409A lingo for an arrangement whereby the deferred compensation will be paid within a short period of time after the deferred compensation ceases to be subject to a "substantial risk of forfeiture" (more 409A lingo). Based on your facts the $XXX ceases to be subject to a substantial risk of forfeiture only upon expiration of the 2-year period. No offense intended, but I am surprised that you are attempting to resolve an issue under 409A yet don't know what "short-term deferral" means.